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Jakarta Post

Indonesia needs greater healthcare budget in 2021 for vaccine: Economist

  • Adrian Wail Akhlas

    The Jakarta Post

Jakarta   /   Fri, September 4, 2020   /   12:27 pm
Indonesia needs greater healthcare budget in 2021 for vaccine: Economist A handout photo provided by the Russian Direct Investment Fund (RDIF) shows samples of a candidate vaccine for COVID-19, developed by the Gamaleya Research Institute of Epidemiology and Microbiology in Moscow on Aug. 6. (REUTERS /The Russian Direct Investment Fund (RDIF)/Handout)

The government will need to increase its budget for health care next year if it wants to provide a coronavirus vaccine for all Indonesians, with vaccinations expected to help stimulate an economy reeling from the pandemic, a senior economist has said.

The government’s 2021 state budget bill, if passed into law, would yet again result in record-high infrastructure spending, University of Indonesia senior economist Faisal Basri said, adding that the government should instead focus more on healthcare spending as the pandemic would continue into next year.

“The government prefers infrastructure development over free vaccines for all Indonesians,” he said during a discussion on Thursday. “But saving lives means saving the economy. If it wants the economy to recover, the key is to tame the pandemic by providing vaccines and ramping up testing.”

The government planned to allocate Rp 169.7 trillion (US$11.45 billion) toward its healthcare budget, which included vaccine procurement, stunting reduction and the national healthcare insurance program, President Joko “Jokowi” Widodo said in an address before the People’s Consultative Assembly on Aug. 14.

In comparison, the government would allocate the greatest sum – Rp 414 trillion – to improve connectivity, develop basic services and support economic recovery next year, the President added.

The government’s failure to control the pandemic would translate into a weaker economic performance, lower tax revenue and an austerity in government expenditure, Faisal said, adding that Indonesia’s debt would increase even more because of it.

Economists expect Indonesia’s debt-to-gross domestic product ratio to increase to 35 to 37 percent by the end of this year, compared to around 30 percent of gross domestic product last year, as the government set aside a Rp 695.2 trillion stimulus to rescue the economy. The Indonesian economy shrank 5.32 percent in the second quarter this year as household spending and investment plummeted.

The government was confident that a coronavirus vaccine would be available by the beginning of next year, said the executive director of the government’s COVID-19 Response and Economic Recovery Committee, Erick Thohir, adding that the government would provide free vaccines for around 93 million Indonesians.

“We would like to stress that those who received the government’s help are those who need it the most,” he told reporters on Wednesday. “We are trying to make it so that this is properly targeted at those who cannot afford vaccines.”

Indonesians who could afford to buy vaccines would be obliged to vaccinate themselves, he went on to say. “This is to reduce the government’s burden.”

The government estimated that a vaccine would cost around $25 to $30 per individual and each individual would need to get vaccinated at least twice, said Erick, who is also the state-owned enterprises minister, as reported by Kompas recently.

Official data show that more than 184,200 people had been infected by the coronavirus as of Thursday afternoon with the death toll reaching 7,750 as the outbreak in the country entered its sixth month. Daily new infections and deaths reached a record high on Thursday with 3,622 cases and 134 deaths.